Politics dominated much of the headlines yesterday, as both parties gear up for the December election. The main news came from Donald Trump who called on Boris Johnson to team up with Nigel Farage to form an “unstoppable force”, and claimed Jeremy Corbyn would be “so bad for (the) country”.
Trump then moved on to the proposed Brexit deal saying that the US “can’t make a trade deal with the UK (under) certain aspects of the deal”, despite Johnson’s claims it would allow the UK to have an independent trade policy.
From an economic point of view, The US Federal Reserve cut interest rates for the third time in a row on Wednesday night, just hours after data showed the US economy slowed in the third quarter. Fed President Powell struck a more cautious tone than at past meetings however, suggesting the central bank will not chop rates again in December. Powell said, “we see the current stance of monetary policy as likely to remain appropriate”. Powell said, following the decision, “as long as incoming information about the economy remains broadly consistent with our outlook.” That outlook predicts “moderate economic growth, a strong labour market, and inflation near our symmetric two per cent objective,” Powell said.
The Federal Open Market Committee (FOMC) opted for a third 25 basis point (0.25 percentage point) cut in as many meetings, taking the central bank’s target interest rate to between 1.5 and 1.75 per cent. Powell said the FOMC “took this step to help keep the US economy strong in the face of global developments, and to provide some insurance against ongoing risks”.
Today we have US employment figures in the form of non-farm payrolls which could see the dollar weaken further should employment numbers disappoint.
At the time of writing;
GBPUSD – Trading below 1.30 at 1.2968
GBPEUR- Trading above 1.16 at 1.1616
EURUSD- Trading at 1.1161
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